NYSE:MGP

Stock Analysis Report

Executive Summary

MGM Growth Properties LLC (NYSE:MGP) is one of the leading publicly traded real estate investment trusts engaged in the acquisition, ownership and leasing of large-scale destination entertainment and leisure resorts, whose diverse amenities include casino gaming, hotel, convention, dining, entertainment and retail offerings.

Rewards

Trading at 25.8% below its fair value

Earnings are forecast to grow 20.34% per year

Earnings grew by 10.4% over the past year

Risk Analysis

Unstable dividend track record

Shareholders have been diluted in the past year



Snowflake Analysis

Proven track record with reasonable growth potential and pays a dividend.


Similar Companies

Share Price & News

How has MGM Growth Properties's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: MGP has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

1.4%

MGP

-0.5%

US REITs

0.5%

US Market


1 Year Return

8.5%

MGP

14.9%

US REITs

20.3%

US Market

Return vs Industry: MGP underperformed the US REITs industry which returned 14.9% over the past year.

Return vs Market: MGP underperformed the US Market which returned 20.3% over the past year.


Shareholder returns

MGPIndustryMarket
7 Day1.4%-0.5%0.5%
30 Day3.6%2.1%2.0%
90 Day9.5%6.5%9.4%
1 Year15.4%8.5%19.6%14.9%22.8%20.3%
3 Year58.6%32.7%36.4%19.3%50.1%40.4%
5 Yearn/a58.1%25.5%73.1%54.1%

Price Volatility Vs. Market

How volatile is MGM Growth Properties's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is MGM Growth Properties undervalued compared to its fair value and its price relative to the market?

25.8%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: MGP ($33.73) is trading below our estimate of fair value ($45.45)

Significantly Below Fair Value: MGP is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: MGP is poor value based on its PE Ratio (42.4x) compared to the REITs industry average (36.3x).

PE vs Market: MGP is poor value based on its PE Ratio (42.4x) compared to the US market (18.3x).


Price to Earnings Growth Ratio

PEG Ratio: MGP is poor value based on its PEG Ratio (2.1x)


Price to Book Ratio

PB vs Industry: MGP is good value based on its PB Ratio (1.5x) compared to the US REITs industry average (2.1x).


Next Steps

Future Growth

How is MGM Growth Properties forecast to perform in the next 1 to 3 years based on estimates from 12 analysts?

20.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: MGP's forecast earnings growth (20.3% per year) is above the savings rate (1.7%).

Earnings vs Market: MGP's earnings (20.3% per year) are forecast to grow faster than the US market (14.2% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: MGP's revenue (2.5% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: MGP's revenue (2.5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: MGP's Return on Equity is forecast to be high in 3 years time (20.8%)


Next Steps

Past Performance

How has MGM Growth Properties performed over the past 5 years?

64.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: MGP has high quality earnings.

Growing Profit Margin: MGP's current net profit margins (8.4%) are higher than last year (6.7%).


Past Earnings Growth Analysis

Earnings Trend: MGP has become profitable over the past 5 years, growing earnings by 64.3% per year.

Accelerating Growth: MGP's earnings growth over the past year (10.4%) is below its 5-year average (64.3% per year).

Earnings vs Industry: MGP earnings growth over the past year (10.4%) exceeded the REITs industry 6.9%.


Return on Equity

High ROE: MGP's Return on Equity (3.8%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is MGM Growth Properties's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: MGP has a high level of physical assets or inventory.

Debt Coverage by Assets: MGP's debt is not covered by short term assets (assets are 0.1x debt).


Financial Institutions Analysis

Asset Level: MGP's level of assets compared to its equity is low.

Allowance for Bad Loans: Insufficient data to determine if MGP has a sufficient allowance for bad loans.

Low Risk Liabilities: MGP reports no customer deposits, loans are made up entirely of externally borrowed funds.

Loan Level: Insufficient data to determine if MGP has an acceptable proportion of non-loan assets held.

Low Risk Deposits: MGP has advanced significantly more loans than the customer deposits it holds.

Level of Bad Loans: Insufficient data to determine if MGP has an appropriate level of bad loans.


Next Steps

Dividend

What is MGM Growth Properties's current dividend yield, its reliability and sustainability?

5.57%

Current Dividend Yield


Dividend Yield vs Market

company5.6%marketbottom25%1.4%markettop25%3.7%industryaverage3.5%forecastin3Years5.8%

Current dividend yield vs market & industry

Notable Dividend: MGP's dividend (5.57%) is higher than the bottom 25% of dividend payers in the US market (1.44%).

High Dividend: MGP's dividend (5.57%) is in the top 25% of dividend payers in the US market (3.73%)


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, MGP has been paying a dividend for less than 10 years.

Growing Dividend: MGP's dividend payments have increased, but the company has only paid a dividend for 4 years.


Current Payout to Shareholders

Dividend Coverage: At its current payout ratio (88%), MGP's payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: MGP's dividends in 3 years are forecast to be thoroughly covered by earnings (0.3% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

3.9yrs

Average board tenure


CEO

James Stewart (53yo)

3.8yrs

Tenure

US$3,541,157

Compensation

Mr. James C. Stewart is Chief Executive Officer of MGM Growth Properties LLC since April 2016. Mr. Stewart serves as Chief Executive Officer of MGP Finance Co-Issuer, Inc. and MGM Growth Properties Operati ...


CEO Compensation Analysis

Compensation vs Market: James's total compensation ($USD3.54M) is below average for companies of similar size in the US market ($USD10.78M).

Compensation vs Earnings: James's compensation has been consistent with company performance over the past year.


Board Members

NamePositionTenureCompensationOwnership
James Murren
Chairman of the Board3.9yrsno data0.23% $26.0m
Thomas Roberts
Lead Independent Director 0yrsUS$261.88k0.0046% $518.0k
William Hornbuckle
Director3.9yrsno data0.034% $3.9m
Daniel Taylor
Director3.9yrsUS$202.50kno data
Michael Rietbrock
Independent Director3.9yrsUS$212.50k0.012% $1.3m
Robert Smith
Independent Director3.1yrsUS$212.50k0.0077% $874.6k
John McManus
Director3.9yrsno data0.024% $2.7m

3.9yrs

Average Tenure

58yo

Average Age

Experienced Board: MGP's board of directors are considered experienced (3.9 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 31.1%.


Top Shareholders

Company Information

MGM Growth Properties LLC's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: MGM Growth Properties LLC
  • Ticker: MGP
  • Exchange: NYSE
  • Founded: 2015
  • Industry: Hotel and Resort REITs
  • Sector: Real Estate
  • Implied Market Cap: US$11.285b
  • Market Cap: US$3.839b
  • Shares outstanding: 331.51m
  • Website: https://www.mgmgrowthproperties.com

Location

  • MGM Growth Properties LLC
  • 1980 Festival Plaza Drive
  • Suite 750
  • Las Vegas
  • Nevada
  • 89135
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
MGPNYSE (New York Stock Exchange)YesClass A SharesUSUSDApr 2016
293DB (Deutsche Boerse AG)YesClass A SharesDEEURApr 2016

Biography

MGM Growth Properties LLC (NYSE:MGP) is one of the leading publicly traded real estate investment trusts engaged in the acquisition, ownership and leasing of large-scale destination entertainment and leisure resorts, whose diverse amenities include casino gaming, hotel, convention, dining, entertainment and retail offerings. MGP currently owns a portfolio of properties, consisting of 11 premier destination resorts in Las Vegas and elsewhere across the United States, MGM Northfield Park in Northfield, OH, Empire Resort Casino in Yonkers, NY, as well as a retail and entertainment district, The Park in Las Vegas. As of December 31, 2019, our destination resorts, the Park, and MGM Northfield Park collectively comprise approximately 27,400 hotel rooms, 1.4 million casino square footage, and 2.7 million convention square footage. As a growth-oriented public real estate entity, MGP expects its relationship with MGM Resorts and other entertainment providers to attractively position MGP for the acquisition of additional properties across the entertainment, hospitality and leisure industries. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/20 04:08
End of Day Share Price2020/02/19 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.